Bus 297D Technology Marketing

Summer, 2010, Session 1

J.J. McClatchy

Joe Giglierano

What is High Technology?

• What is technology?

• What is High Technology?– Definitions based on R&D spending or

intensity– Number of technical employees– Common characteristics– Contribution of new technology to value

delivered

Common Characteristics

Technological uncertainty

Market uncertainty

Competitive volatility

Common Characteristics

• Technological uncertainty• Market uncertainty• Competitive volatility• Others possible:

– High first unit costs– Demand side increasing returns– IP– Knowledge spillovers

Key Marketing Ideas

• Marketing concept and market orientation

• Value and Porter’s Value Chain

• Strategic Management Model

• Technology Adoption Life Cycle

Marketing Concept

A firm will tend to perform well when it:– understands the needs and wants of

targeted customers and prospective customers;

– delivers superior value by meeting those needs and wants through coordinated activities

– does this while working toward organizational goals

Implications of Marketing Concept

• Need to target segments• Need to understand motivations and

behavior of customers and prospects• Need to create an integrated package of

products, services, communications, channels, and prices

• Need to manage so that meeting customer needs drives profits

Elements of Market Orientation

• Scanning and learning– e.g. market research, evaluation of program

results, satisfaction measurement

• Information dissemination– e.g. intranet, team meetings, cross-functional

team design, informal networks

• Enabling / reinforcing structure– e.g. values, policies, reward system

More Market Orientation Elements

• Use of information– e.g. strategic thinking, marketing planning,

implementation planning, planned adaptation

• Execution effectiveness– e.g. programs and tactics done well, activities

coordinated, end results pursued and obtained, performance data collected and used

Porter’s Value Chain

Support Activities

Direct Activities

Offering Target

Customers

ProductServiceImageComm.Channl Utils.Price

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INFRASTRUCTURE

HUMAN RESOURCES & DEVELOPMENT

TECHNOLOGY & DEVELOPMENT

PROCUREMENT

SUPPORTACTIVITIES

DIRECTACTIVITIES

PORTER’S VALUE CHAIN

Value Concepts

• Value = sum of benefits minus sum of costs– Implication: value can be increased by raising

benefits or reducing costs

• Value is Perceived Value in the eyes of prospects and customers– Implication: vendor’s view of value may be

different than prospects’ / customers’ view– A Reality: perceptions may be malleable, but

ultimately rely on experienced performance

Implications of Value Chain + Definitions

• Segments exist• Value comes from more than product• Markets change concurrently with

technology change => uncertainty• Marketing must be involved in product

design and strategy• Best technology does not always “win,” but• Technology can be the reason you lose

Strategic Management Model

Goals/Objectives

Environme ntalAnalysis

StrategyDesign

Imp lementationPlanning

Imp lementation

Monitoring

AnalyzePerforman ce

Adjustments

CustomersCom peti torsChannelsCom panyPubl ic Policy

Value Network

CustomerSegmentVendor

Partner

Partner

Partner

Technology Adoption Life Cycle

# New Users

Time

technophiles

visionaries

pragmatists

conservatives

Skeptics - laggards

CHASM

Segments in Adoption of New Technologies

CHASM

VISIONARIES

PRAGMATISTS OFDIFFERENT TYPES;SOME CONSERVATIVES?

# OF NEWADOPTERS

TIME

FIRST PRAGMATISTS

TECHNOPHILES

Concurrent Processes in a Technology Startup

IDEA

Strategy Dev

Product Dev

Customer Value DevOrganization Dev

Financing Dev

Initial ValuePropositionInitial Product ConceptInitial choice of target segmentsBuild the TeamInitial businesspitch prepared

Validate

Strategy Dev

Product Dev

Customer Value Dev

Organization Dev

Financing

Concurrent Processes, continued

Simple.Strategy

Test, validate,revise Test, validate,revise

Test, validate,revise Test, validate,revise

Test, validate,revise Test, validate,revise

Test, validate,revise

Test, validate,revise

Test, validate,revise

Test, validate,revise

Init. Bus.Model

ElaboratedModel & Strategy

Prototypes Dev. customer 1st customer(s)

Customer info Target & recruit Translate to next segs.

Early hires Build strengths Early co-ord. procedures

Early money Bus. Plan More formal $

Other Key Ideas to Weave In

• Bootstrapping – marketing in a startup that is not venture funded

• Expeditionary Marketing (marketing by iterative learning)

• “Business Development” as early stage marketing

• Marketing processes

How is Technology Marketing Different from Traditional 4Ps

Marketing

• Marketing Processes – Different configurations– Customer Decision Processes– Customer/market knowledge development process– NPD process– IMC process– CRM process– Customer fulfillment process

Process Evolution

New Prod Dev &Bus Dev

NPD

Launch

Market/CustrKnowing

CRM

Comm

Sales

IMC

Fulfillment